Assessor’s Race Centers on Balance of Tax Burden

Homeowners have been far less successful than businesses in winning appeals for lower property tax assessments, a Chicago News Cooperative analysis shows — a discrepancy that strikes at a key issue in the race to replace James Houlihan, the retiring Cook County assessor.

An examination of data found that from 2006 through 2008, Mr. Houlihan’s office granted tax cuts to only 17.3 percent of appeals on residential parcels, while non-residential property appeals during the same period were granted more than 40 percent of the time.

The analysis of records from the assessor’s office, which covered decisions on more than 671,000 parcels, also revealed that successful non-residential appeals got tax breaks averaging more than 25 percent, compared with an average reduction of 15 percent for successful homeowner appeals.

Mr. Houlihan is retiring at the end of this year after 12 years in office, and his departure from the relatively low-profile, yet highly influential post has unleashed a fierce and unusual campaign to replace him in the Nov. 4 election.

Amid the recession, much of the debate between the candidates revolves around how the election would affect homeowners hit with sharply higher property tax bills and whether the balance of the tax burden is split fairly between residential taxpayers and businesses.

In the heavily Democratic county, Joseph Berrios, the winner of the party’s primary in February, initially seemed poised to succeed Mr. Houlihan. Besides being the chairman of the county Democratic Party and a lobbyist in Springfield, Mr. Berrios has experience in property tax appeals as the longest-serving member on the three-man Cook County Board of Review. The panel also reviews assessments and has the power to reduce values.

Property owners can appeal to the county assessor’s office or to the Board of Review. Disputes can also wind up in the court system.

The biggest obstacle for Mr. Berrios could be another longtime Democratic politician, Forrest Claypool. Shortly after Mr. Berrios won a surprisingly narrow victory in the primary, Mr. Claypool announced plans to run for assessor as an independent in the November election.

Mr. Claypool is best known for his close loss to the ailing John Stroger in the 2006 Democratic primary for president of the Cook County Board. Mr. Claypool this year passed on the chance to challenge Todd Stroger, Mr. Stroger’s son and successor, and he now is busy amassing the signature petitions needed to get on the ballot as an independent candidate for assessor. That is not an easy feat, given Illinois’s campaign laws that often frustrate those who try to operate outside the two-party system. Mr. Claypool must amass 25,000 signatures by June 20.

Photo

Homeowners filed appeals of their property tax evaluations on May 24 at the Cook County Board of Review.Credit
Jose More/Chicago News Cooperative

Mr. Claypool said his campaign for assessor was motivated primarily by his desire to help homeowners who are struggling to pay their property taxes.

Ten years ago, the total assessed value of commercial properties and of residential parcels in Cook County was roughly even. The balance has since shifted so that a vast majority of the tax burden now falls on homeowners.

Mr. Claypool notes that Mr. Berrios, in his 21 years as a Board of Review commissioner, has relied heavily on campaign donations from lawyers who appear before the board, often on behalf of major commercial property owners. Property tax lawyers have donated about $3 million to his campaigns in the past decade, almost two-thirds of all political contributions that have gone into Mr. Berrios’s war chest. Mr. Claypool said he would not take any campaign donations from tax-appeal lawyers.

“There is a Berrios tax shift that takes place every year when he gives out these hard-to-explain tax cuts to his friends and campaign donors,” Mr. Claypool said in an interview last week. “It’s the homeowners who end up making up the difference in higher property taxes.”

In addition to reviewing the assessor’s actions, a computer-assisted analysis examined Board of Review decisions on appeals affecting almost 800,000 properties from 2006 through 2008.

Like the assessor, the board gave proportionately greater tax relief to non-residential applicants than to homeowners who had sought a break. At the board, successful residential appellants got an average cut of 10.3 percent, while commercial properties received reductions that averaged 17.6 percent.

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But homeowners were far more likely to get satisfaction from the board than from the assessor. More than 73 percent of homeowner appeals to the board resulted in at least some relief, the analysis found.

Meanwhile, the rate of successful appeals by non-residential property owners was 45.3 percent, roughly comparable to the figure for the assessor’s office.

Mr. Berrios and other Board of Review officials asserted that the number of people getting some relief showed they did not treat homeowners adversely.

“The board has always been a homeowner’s advocate,” Mr. Berrios said. “We pride ourselves on doing everything we can to help homeowners.”

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Homeowner appeals of the county’s tax appraisals of their property fill scores of boxes at the Cook County Board of Review.Credit
Jose More/Chicago News Cooperative

Scott Guetzow, the chief deputy commissioner for the Board of Review, said: “I don’t think there is any bias. It’s politically popular to run and say you will help homeowners, but we’ve actually delivered for them.”

Mr. Houlihan and Mr. Berrios are feuding over a variety of matters, accusing each other of being responsible for delays in sending out tax bills. But aides for both men said their offices should bear no blame for giving bigger breaks on average to non-residential property owners rather than to homeowners.

The aides said it was more difficult for them to accurately set the values of commercial properties than homes, allowing more latitude for successful appeals on those buildings.

“Commercial properties don’t lend themselves to the same sort of cookie-cutter analysis as residential properties,” said Thomas Jaconetty, chief of staff to Mr. Berrios and one of the lawyers for the county Democratic Party who plan to challenge the validity of signatures on Mr. Claypool’s nominating petitions.

Eric W. Herman, a spokesman for Mr. Houlihan, said commercial properties were unlike homes in that they “tend to be unique and have individualized circumstances.”

“With commercial appeals, we often receive new data on vacancy, income, expenses and other economic factors that change year by year,” Mr. Herman said, adding that this can give officials better reason to grant a break to owners of non-residential parcels.

The success rate of homeowners who seek breaks from Mr. Houlihan’s office has declined, Mr. Herman said, partly because the office “has made it easier for homeowners to appeal, greatly increasing the number of people who do so.”

William Ahern, a spokesman for the Tax Foundation, a nonpartisan group in Washington that advocates for lower taxes, said it was wrong to assume that lowering residential taxes and shifting the burden to commercial properties would be preferable to the current situation. Higher taxes for commercial properties could cause businesses to pass on those costs to consumers, he said.

In the end, the assessor and the board decide how the tax burden is divided. How much revenue has to be generated through property taxes is up to the leaders of local government, schools and other agencies that levy taxes.

“Property taxes can only be lowered if politicians in Cook County spend less,” Mr. Ahern said. “The battle between residential and non-residential owners is a distraction from the real problem of higher spending.”

Correction: June 20, 2010

Because of an editing error, an article last Sunday about the election for Cook County assessor misstated the deadline for independent candidates to collect 25,000 signatures to get on the ballot. It is this Monday — not Monday, June 28.

A version of this article appears in print on June 13, 2010, on Page A31A of the National edition with the headline: Assessor’s Race Centers on Balance of Tax Burden. Order Reprints|Today's Paper|Subscribe